As a share of the overall economy, information and communications technology (ICT) stands out as one of the most productive sectors in Jordan. ICT accounts for the largest share of GDP per worker, generating 14.1% of the kingdom’s GDP, while directly employing just 1.23% of the workforce. The comparably large tourism sector, which generated 14.3% of GDP, directly employed a workforce about twice the size, accounting for 3.28% of those employed in Jordan.

The country’s IT sector did not appear overnight, however. The sector’s evolution has taken place over the past decade, thanks to the efforts of public and private stakeholders. The authorities began honing in on the sector back in 1999, when King Abdullah II ibn Al Hussein introduced the REACH Initiative, the first national IT strategy. The five-year plan focused on competitiveness and forging partnerships between the public sector and IT companies. During the programme, which ran from 1999 to 2007, IT revenues grew from $60m to $1.4bn and the number of IT jobs increased from 1000 to 17,000. Following the successes of REACH, the government and sector stakeholders moved to create the National ICT Strategy 2007-11, a document outlining benchmarks in areas like internet penetration, job creation and revenue growth, as well as strategies for reaching those goals. In late 2012, the government released a draft National ICT Strategy 2013-17, inviting the public to submit feedback on the document before final publication. The draft picks up from where the previous one left off, focusing on an evolving role for government, continued infrastructure development, and improved links between IT and other sectors.

LAY OF THE LAND: Jordan offers its IT operators several important advantages over other countries in the region, including a well-trained workforce, a stable business environment and accommodating regulations. “Within the region we still have the best environment for foreign companies,” Raed Hajarat, Oracle’s managing director in Jordan, told OBG. “We have the least amount of political risk and a high availability of resources. We are also among the more cost-effective places for foreign companies to set up shop.”

One of the keys to success so far has been the homegrown, highly skilled labour force –approximately 98% of employees in the ICT sector were Jordanian nationals in 2011, according to data gathered by the Information and Communications Association of Jordan (int@j), the kingdom’s largest IT trade organisation. Furthermore, the number of students studying in ICT-related disciplines remains substantial. During the 2010/11 academic year, there were 35,882 undergraduate engineering students and some 21,351 undergraduate maths and computer science students, according to the Ministry of Higher Education and Scientific Research at the time of publication. Combined, these two categories made up just over 27% of all undergraduates.

About 5000 graduates each year pursue IT as a career, Abed Shamlawi, head of int@j, told local daily The

TALENT POOL: This annual crop of IT talent has served the country well, providing firms with a highly skilled workforce. “The engineers are amazing here,” Hazim Alaeddin, CEO of Amman-based internet and telecoms operator Kulacom, told OBG. As wages are comparatively low in Jordan, graduates often look abroad for jobs, although many also opt to stay in the kingdom or return following stints abroad. Of the 5000 IT graduates each year, about 3000 stay in Jordan to work. “A lot graduates do not want to go abroad to find work, since this is their home,” Alaeddin said.

The pool of Jordanian IT graduates that want to work locally allows firms to benefit from skilled labour at a comparatively low cost. Still, education could be improved. “We have the human capital here in Jordan and the country graduates a high percentage of students who specialise in ICT, but it is hard to find graduates ready to engage with the sectors’ technology.

Despite this, Jordan is an excellent consumer of technology, so the learning curve is shorter,” Rula Ammuri, CEO of Professionals for Smart Technology, told OBG.

STABLE ENVIRONMENT: In addition to its well-trained IT workforce, Jordan also offers a stable business environment. The country has long been useful for those seeking calmer environs in an often tumultuous region. The government, meanwhile, has also been quite supportive of the sector’s development.

In the past, government contracts used to be a mainstay for IT operators’ businesses. Although the state’s role as a customer has shrank as a result of recent budget cuts, the change has also encouraged IT companies to seek more private contracts, both within and outside the kingdom. King Abdullah has also taken an interest in the field. In addition to pushing forward the aforementioned ICT national strategies, he has also worked to reform school curricula to include more ICT.

As for regulation, the government has erred on the side of liberalisation, keeping the market open to competition. Two government entities monitor the sector’s progress: the Ministry of Information and Communications Technology (MoICT) and the Telecommunications Regulatory Commission (TRC). The MoICT, set up in April 2002 by government decree, is responsible for drawing up and executing IT strategies. The TRC, meanwhile, creates policies surrounding telecoms and inter-net infrastructure development that also affects the IT sector. Both entities have worked to ensure competition is strong but not overbearing, which can sometimes be a tricky balance to maintain (see analysis).

BY THE NUMBERS: Factors like a well-trained workforce, stable business climate and government cooperation have helped fuel impressive growth in the past decade. Between 2002 and 2011, total sector revenues more than tripled, growing from $228.5m to $738.2m, according to data from the MoICT and int@j. Growth was concentrated between 2002 and 2008, averaging a year-on-year increase of 28.7% during that period. With the global credit crunch in 2009 and 2010, however, revenues contracted by an average of 12.6% each year, before returning to modest growth in 2011 of 0.85%. In addition, economic conditions including changes in government spending also contributed to lower revenues. Domestic companies hit by the financial crisis cut back their IT spending to lower costs, while reductions to the state budget resulted in delays or cancellations of planned public projects.

Although these conditions did create challenges for IT firms, they also helped spur them towards producing more export-oriented goods and services. During these years of shrinking revenues, exports fell by a total of 10.8%, compared to domestic revenues, which dropped by about 28%. In addition, it was exports alone that carried the sector as a whole back to growth. Export revenues increased by 14% in 2011, while domestic revenues continued to contract by 4%. The government and other stakeholders are working to continue shoring up exports, where they see the most sustainable path to continued development (see analysis).

The data from the MoICT and int@j also identifies the sector’s leading segments. The biggest breadwinner remains the wholesale of computers, peripherals and software, which brought in $240.6m, about a third of total revenues in 2011. This was followed by computer programming activities, which earned $176.1m, accounting for 23% of total revenues. Four other segments generated over $50m in annual revenue that year, accounting for 7-8% of the total: data processing and hosting ($62m), software publishing ($57.1m), telecoms equipment wholesale ($54.7m) and installation of communications equipment ($53.7m).

GOING ONLINE: The expansion of the kingdom’s IT sector has been supported by growing internet penetration. Jordan is no newcomer to the internet. In the early 2000s, when owning a computer was less common, internet use was still strong, particularly among young people, and internet cafes began sprouting up across the country to meet the demand for low-cost access. In the northern city of Irbid, for example, where three major universities are located, residents claimed the city held the world record for “the most internet cafes in a single kilometre”.

This history of quick adoption helps explain fast-growing web penetration. Between 2000 and 2012, the percentage of individuals using the internet grew from 2.6% to 67%, or about 4.3m out of the country’s estimated 6.4m people, according to data from the TRC. Subscription numbers are far lower, however, since multiple users often share one service contract. By the end of 2012, there were 992,740 internet subscriptions in the country, including ADSL, cable, mobile broadband, leased line, dial-up and WiMAX. In 2012 the TRC reported a penetration rate of 60%.

Mobile broadband was by far the largest growth driver. By 2012, all three of Jordan’s major telecoms operators had rolled out their 3G networks, the results of which are visible in web subscription data: mobile broadband subscriptions nearly doubled between the first and fourth quarters of 2012, showing a 97% increase. The rise in mobile broadband came partially at the cost of other protocols, largely dial-up, which registered a 95.4% drop from 18,132 subscribers in the first quarter to only 828 subscribers by the end of the fourth quarter. Other falls in subscriptions also occurred for ADSL (-4.1%), WiMAX (-1.8%) and leased lines (-5.5%).

Several factors have contributed to the mobile boom in recent years. Rapidly improving infrastructure has helped make services available to virtually all residents, while ongoing investments continue to improve the quality of service. Between 2009 and 2011, mobile operators invested about JD345m ($485m) in Jordan, according to data from the TRC. Increasing demand for web content has helped operators gain returns on their investments. The growing popularity of social media, music, games and news is transforming web access from a luxury to a necessity in the eyes of many Jordanians. Since mobile data packages can be bought on pre-paid plans, they offer a flexible solution to new users who may not want a long-term contract. Mobile inter-net’s upfront costs are also generally cheaper than a wired web subscription. As the price of smartphones comes down with the release of more affordable models, the cost barriers to mobile internet will likely continue to shrink. In addition to lower initial costs, many mobile applications can actually help save money. With technologies like voice over internet protocol, for example, customers can use their data connections to save money on “legacy services” like SMS and voice calls.

INTERNATIONAL INFRASTRUCTURE: As for fixed infrastructure, Jordan has a mix of copper, fibre and wireless technologies connecting homes and businesses to the web. Owing to its political stability, central geographic location and business ties with neighbours, Jordan has joined several international fibre projects, affording the country one of the most developed international infrastructures in the region. In 1999 the kingdom connected to the 27,300-km Fibre-optic Link Around the Globe (FLAG) submarine cable. The Indian-owned link stretches from the east cost of the US to Japan via Europe and Asia. A decade later, in 2010, Amman was included as a node in two major terrestrial fibre lines set to run through the region: the Regional Cable Network (RCN) and the Jeddah, Amman, Damascus, Istanbul (JADI) Link. RCN is set to extend 7750 km from Fujairah, UAE to Istanbul, Turkey. Jordan, located almost exactly in the middle of the line, stands to gain not only from increased capacity but also from growing attractiveness as an IT centre. “Global ICT companies will be encouraged to open their regional offices in Jordan as the new cables increase Jordan’s capacity and redundancy,” said then Zain Jordan CEO Abdul Malek Al Jaber, following the announcement of the project. The 2530-km JADI Link project, meanwhile, is set to compete with RCN. JADI aims to bring together existing national infrastructures to create a terrestrial alternative to submarine links that run via the Red Sea.

DOMESTIC NETWORK: Developments are fast under way in the country’s domestic network as well. In the fixed segment, Jordan Telecom Group (JTG) maintains a monopoly on the copper telephone wire network over which all ADSL services are delivered. Other operators, therefore, are limited to acting as resellers. There were 192,738 ADSL subscriptions in the country at the end of 2012, accounting for less than two-thirds of total fixed subscriptions at that time, according to data from the TRC. The TRC is also working on a local loop unbundling scheme that is set to introduce more competition to the sector.

Outside of copper, competition to deliver web services has been lively. During the 2000s, the number of internet service providers grew considerably. At any given time, about nine private players, along with the government and the military (which maintain their own networks), were digging up streets, installing receivers and running wires across the country to create web infrastructure. “I would confidently guess that the amount of fibre already laid under the streets of Amman is among the greatest in the world,” Tamer Atia, the CEO of internet service provider Blink Networks, told OBG. “Regrettably, a lot of this infrastructure is redundant as it is duplicated and fragmented between a large number of operators. So all this fibre has not translated to proportionally high connections for the city.” In recent years the sector has seen consolidation, as players were either acquired by others or dropped out of the market. In July 2012, for example, telecoms operator Zain made a bid to buy out internet service provider Mada and, in December 2012, Wi-Tribe, a division of Qatar-based Qtel, left the market entirely.

SHARING: “The TRC, through its market reviews, has identified market dominance and put in place the proper regulatory remedies, which are under implementation,” Mohammad Al Taani, the CEO and chairman of the board of the TRC, told OBG in December 2012. Once clearer definitions of dominance are in place and responsibilities are defined for dominant players, the market could benefit from more cooperation among providers. This could take place in several ways. Legislation requiring companies to share their infrastructure would allow other firms to begin offering more virtual network services by leasing bandwidth at wholesale rates. These virtual operators could then create plans that cater to underserved market niches. Indeed, because Jordan has an extensive fibre network already in place, more initiatives to interconnect this infrastructure could result in a better user experience and, over time, more business for operators. More infrastructure sharing on the private level could also go along well with the government’s own plan for a National Broadband Network (NBN). The partially complete network began in 2003 but came to a halt in 2008 due to funding issues. The authorities are looking into leasing privately held fibre infrastructure to revive the project. Arrangements are in progress between public and private stakeholders that could push the NBN ahead (see analysis).

CONTENT DEVELOPMENT: With its growing web infrastructure, well-educated population and expanding core of IT firms, the kingdom has many of the key ingredients for digital content creation. The country already hosts a number of successful websites and content providers, perhaps the most famous of which was, which was acquired by Yahoo! in 2009 for $164m. An open web environment helped encourage the industry in Jordan early on. The government kept a largely hands-off approach to the web in the past, which has encouraged content developers that rely on a more liberal environment to set up operations in the kingdom. “Jordan’s ICT sector has historically been – and continues to be – ahead of the curve due to the fact that it’s quite easy to publish content and obtain operating licences,” Bashar Hantouli, CEO of Amman-based mobile solutions provider BeeCell, told OBG.

FUN & GAMES: In recent years, the games industry in particular has begun to gain more momentum. The Jordan Gaming Development Task Force (JGTF), operating under the auspices of int@j, works to support the sector’s development through conferences, competitions and other networking opportunities for game developers. The task force includes Jordan’s major players, like developers Quirkat, Beladcom and Maysalward, as well as Gate2Play, an online gaming payment gateway. Alongside JGTF, Jordan’s Interactive Gaming Lab, financed by the King Abdullah II Fund for Development (KAFD), was established to give would-be game creators a space to develop their skills. In addition to new facilities and equipment, the lab offers courses in fields like game and interface design. Several multinational companies have taken notice of the authorities’ efforts to promote the kingdom’s gaming sector, with Sony, Unity, Nokia, Microsoft and others beginning to participate.

The market for games and other apps on mobile platforms is also growing. About 42% of all handsets in Jordan were smartphones, according to Amman-based Arab Advisors Group’s “Jordan Smartphone Survey 2011”. As smartphone penetration continues to increase, so too does the potential market for apps. To begin cultivating interest in app development among young people, the KAFD has been running the App Challenge, a biannual programming competition, since early 2011. The competition, open to high school students ages 15-17, provides participants with five days of training, after which they have a month to create their submissions. The winners receive prizes valued at $10,000, half of which is donated to the IT development of their school, and half of which is disbursed to winning members in the form of various gifts. The winner of the second cycle, a tourism app called Jordan Unearthed, provides tourists with information about Jordanian food and products.

The app was released in February 2012. Mobile content services providers are also starting to move into app development. Before smartphones, these companies focused on content delivery for telecoms operators, which could deliver ringtones, images and music to feature phones as well as smartphones. “The industry has changed rapidly in the past few years, which has led to a boom in new media services,” Issa Fakhoury, general manager at Amman-based mobile content provider ArabiaCell, told OBG. “Mobile has become the new service choice for information. Jordan’s ICT sector has been quick to capitalise on its capabilities in this area and export home-grown applications throughout the region.” As smartphone penetration rises, mobile content firms like Amman-based Beecell and Dubai-based are expanding their app offerings.

In May 2012, said it was working on creating apps in the kingdom that could be exported to countries across the region.

E-COMMERCE: Developing methods of mobile payment could offer a major boost to app developers and other content providers looking to monetise their products. Across the Middle East, rates of credit card use and e-commerce have not yet reached those of more mature markets like Europe and North America, however, making it tricky to execute online payments. In some areas, including Jordan, that trend is beginning to change.

Between 2010 and 2011, the percentage of Jordanian internet users who shopped online rose from 15.4% to 24.4%, according to data from Amman-based research and consulting firm Arab Advisors Group published in March 2012. “While the Arab countries are at varying degrees of development when it comes to broadband and e-commerce adoption, a majority of the Arab markets are showing excellent growth. This bodes well for regional and global e-commerce players targeting the Arab world,” Jawad Abassi, founder and general manager of Arab Advisors Group, said following the release.

“The rise in e-commerce expenditure in Jordan between 2010 and 2011 is one example of this regional boom.”

However, it has been noted that the potential is significantly greater than the current supply provides.

Abdul Al Jaber, CEO of MENA Apps, told OBG, “Turkey has 75m people and size of e-commerce is $16bn, while the Arab world has 350m people and e-commerce is only worth $5bn. This shows how slow the region has been to adopt these technologies, but it also highlights the astounding potential for this business segment in the Arab world.”

OUTLOOK: Looking ahead, the sector appears to be shifting toward a more export-oriented framework.

Revenue patterns in 2009 and 2010 demonstrated that a large set of export partners can help the sector stay strong even when many economies are contracting. In its current draft of the upcoming five-year plan, the government outlines the importance of exports for the IT sector and strategies for promoting them. With the fundamentals for growth in place, including a topnotch workforce, expanding infrastructure, and strong links between public and private stakeholders, the sector is approaching the future on a very solid footing.